Analyst: Atom-based Apple in months, Chinese iPhone in 2008

A new research note by Lehman Brothers calls for an Apple device with an Intel Atom processor within 12 months, and expects the iPhone to reach more than one billion potential customers before the end of 2008.

Analyst Ben Reitzes makes the prediction based on Intel chief Paul Otellini's talks at a Lehman-hosted telecoms conference, where the semiconductor company head notes that he has been "positively surprised" by the take-up of the Atom by the market.

The statement contributes to an existing sentiment at Lehman that Apple may release an ultra-portable device within a year that Reitzes speculates would be oriented towards sharing media. This likelihood grows even further with statements by Otellini that future iterations of Atom will be efficient enough to fit into iPhone-sized devices as early as 2009; having this technology at the smartphone level could have significant implications for Apple, Reitzes says.

"We believe any product using Intel architecture in terms of an ultra-portable or iPhone could be met with orders in the multiple millions, making our estimates for Apple conservative," he elaborates.

The financial researcher also notes that Apple's steadily growing number of carrier deals now gives it access to a potential 650 million subscribers as of the TeliaSonera deal, or about four times as many subscribers that can be reached today. The rapid expansion is characterized as evidence that Apple is pushing for sheer volume in terms of sales and that the company may be counting on added iPhone numbers to compensate for reduced or absent carrier payments.

That number may also be poised to explode before the year is over, the analyst notes: Lehman anticipates the signing of a Chinese carrier by the end of 2008 that would push Apple's total potential customer base to one billion, or more than six times the current range. Such expansion will not only help Apple reach targets but could see any success spill over into other categories.

"We believe higher phone volumes mean that Apple will experience an enhanced halo effect that could drive millions of upside to Mac units," the researcher states.

It's only a matter of time before we see SEVERAL products from Apple that rely on the Atom processor.

I very much doubt it, if you are talking about handheld products. AppleTV or something is a different matter.

Give me one good reason why Apple would release a handheld product with an Atom. Because Intel released it is not a good reason. Apple will use ARM processors for the foreseeable future.

Really, you have to question the level of intelligence of these analysts when they say things like releasing an Intel arch device will sell millions. Why? Its bigger and more power hungry but the masses will run out and buy it because it runs on x86? How many customers will know or care what their handheld runs? Pity the people who actually trade on this guy's pronouncements.

And I think one of the first will be the AppleTV. It runs close to the edge thermally and this would help. Give it a little more CPU power and cost less, too.

If Apple is smart, they won't even announce a change. It's just an appliance, no reason for customers to know what is inside.

I think you're right. The atom would seem to be a nice fit for the ATV.

I'm thinking of getting an ATV but am waiting for a hardware revision. Every time I visit the Apple store and see one, I imidiately notice how hot those things get. I worry that will cause a HW failure given enough time.

The Atom is a great processor but I would take this whole article with a huge grain of salt. The reason being that there are a lot of good low-power processors out there and whether or not it's an intel one with x86 instructions matters hardly at all to a portable OS-X device.

The fact that this researcher thinks that millions of extra orders will hit just because Apple is using an intel processor (versus perhaps getting the same performance out of a future ARM chip or even a custom made chip of their own design) is highly suspicious in my book.

It's almost like they are thinking that simply because the Atom is the popular new processor that adding it to an Apple device will result in increased orders because of some loopy brand recognition or something.

China's population is in BILLIONS!!!
Imagine taking just 10% of that...or even 1%. That's like total number of iPhone users in US. =)

Its not BILLIONS its around 1.3 Billion. Still nothing to gock at thought.

10% = 130 Million(ish)
1% = 13 Million(ish)

I think the iphone has sold what around 5.5 million worldwide so far; so your overall determination is somewhat accurate given the entire population has access or the money to buy it in the first place.

I very much doubt it, if you are talking about handheld products. AppleTV or something is a different matter.

Give me one good reason why Apple would release a handheld product with an Atom. Because Intel released it is not a good reason. Apple will use ARM processors for the foreseeable future.

Really, you have to question the level of intelligence of these analysts when they say things like releasing an Intel arch device will sell millions. Why? Its bigger and more power hungry but the masses will run out and buy it because it runs on x86? How many customers will know or care what their handheld runs? Pity the people who actually trade on this guy's pronouncements.

Lets not forget that Branding is on of the most powerful marketing tools a company has. Slap a known name (Intel) on something and all of a sudden you have an instant customer base willing to at least hear what you have to say. The use of "Branding" is great way to get a so so product out the door.